President Obama on Monday renewed his call for Congress to extend tax cuts for families earning up to $250,000 a year, breaking from leaders of his own party who want to extend tax breaks to everyone making up to $1 million a year.
"It's time to let the tax cuts for the wealthiest Americans -- folks like myself -- to expire," Obama told a White House crowd of about 200. "I'm not proposing anything radical here. ... And this is not just my opinion. The American people are with me on this." Obama's proposal stands in contrast to a plan backed by leading Democrats -- including House Minority Leader Nancy Pelosi, D-Calif., and Sen. Chuck Schumer, D-N.Y. -- who would extend the cuts, set to expire at year's end, for households earning up to $1 million. Republicans, meanwhile, want to renew the cuts for all taxpayers regardless of income, something Obama has dismissed as benefiting millionaires and billionaires at the expense of the middle class.
Obama said the government can't afford a broader extension of the tax cuts that were originally implemented by former President George W. Bush. He agreed to extend all tax cuts in an earlier deal with Republicans, but vowed to extend them only for the middle class this time.
Congress should approve his middle-class tax cuts and debate after the November election whether to extend those cuts to people making more $250,000, he said.
"Once the election is over," Obama said, "we'll be in a good position to decide how to reform our entire tax code."
Senate Democrats plan to vote on Obama's proposal next month, though the issue of which tax cuts will actually be extended won't be fully resolved until after the election. House Republicans, who on Monday attacked Obama's proposal as a "massive tax hike" on job creators, will push for a vote to extend the tax cuts for all taxpayers.
Letting the tax cuts expire for higher earners would hurt small businesses and create economic uncertainty, Republicans argue.
"President Obama's tax increases on families and job creators will create more economic uncertainty and fewer opportunities for struggling middle-class families," said Amanda Henneberg, a spokeswoman for presumptive Republican nominee Mitt Romney. "From day one, Mitt Romney [if elected] will take action to lower marginal rates, help middle-class Americans save and invest, and jump-start economic growth and job creation."
Obama says his proposal would raise taxes on just 3 percent of small business owners and hit mainly "hedge fund managers" and "law firm partners" who are better off than most, according to White House spokesman Jay Carney.
"This isn't about taxing job creators," Obama said. "This is about helping job creators."
He framed the election as a choice between using the tax cuts to aid the ailing middle class or expanding them to all taxpayers so that the rich gain disproportionately.
"My opponent will fight to keep them in place," Obama said. "I will fight to end them."
Obama on Tuesday will take his renewed call for a middle-class tax cut to Iowa, where he will meet with a couple the White House says has benefited from the president's tax policies.